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Green Mountain, Wasatch County, Utah |
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The Green Mountain project was brought to BLoC by a trusted syndicate partner. The Loan request was for $2.9 mil. The property securing the loan had recently been put under contract for $8 mil. It had an appraised value of $10 mil.
The property was 62 acres in a beautiful location in Midway, Utah. Twenty three (23) of those sixty two (62) acres did not allow for buildings due to the very attractive geological features of the property, which included three springs: an Artesian spring, a warm spring, and a hot spring that issues 102° F water year round. BLoC entered the loan as a syndicate partner. The loan was funded with a 1st Deed of Trust, and the borrower proceeded toward project implementation.
However, before the borrower could get long-term financing, a party that was in dispute with the
borrower—on a matter unrelated to the loan—filed a “Lis Pendens” against the property. This Lis Pendens was subordinate to the syndicate’s 1st Deed of Trust, but would have been ahead of a development lender in a take out. And, since development lenders generally have a strong aversion for subordination, the A&D loan became very difficult for the borrower to obtain.
The loan syndicate worked with the borrower for months, seeking to find a solution, but finally
foreclosed and purchased BLoC’s ownership in the property — paying all of the interest and fees due. Therefore, BLoC was able to collect its funds, close out the loan, and distribute the related profits to the Limited Partners of BLoC.
In this syndicated loan, BLoC was a minority lender. Nevertheless, this transaction remains as the only property that has been foreclosed to date. BLoC’s loan documents will always contain language that protects the fund’s capital from non-performing loans in the strongest possible way. Nevertheless BLoC continues its efforts to avoid the foreclosure process, to the extent that it’s possible and prudent. |
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